DeFi (Decentralized Finance), as a new financial model compared to the existing financial system, has set off a storm around the world with its innovation and inclusiveness. After several years of development, due to the basic maturity of technology and business, the existing DeFi projects in the market have reached a certain scale, withstood the test of the market and attracted the favor of many investors. According to the latest data from debank, the total lock-up volume of DeFi has reached 158.9 billion US dollars, a year-on-year increase of 1621%. Among them, the 24-hour trading volume of the leading project Uniswap is close to 1 billion US dollars, and the number of users has reached 2.79 million. It can be seen that DeFi, as a brand new financial model, has completed its early exploration and successfully entered the 1.0 stage. But at the same time, the DeFi 1.0 model also has some flaws, so exploring the more mature DeFi 2.0 has become a top priority for the industry.

There are already many so-called DeFi 2.0 projects in the existing financial market, but most of them are limited to micro-innovations at the level of liquidity and incentive mechanisms, and only upgrade some of the functions of 1.0 to improve asset utilization efficiency. It can only be called DeFi 1.1 and cannot take on the important task of 2.0. DeFi 2.0 should be a historic revolution. It can solve the major shortcomings of existing projects, completely improve the status quo of DeFi, and set off huge waves in the field of financial investment.

First of all, the current DeFi has not exerted its maximum market potential. Compared with the universal nature of traditional financial services such as banks and wealth management products, DeFi is more like a game between programmers and professional investors. Retail investors and the general public are often limited by their lack of professional knowledge and dare not invest. I was cut leeks myself. This has led to high barriers to entry in the current DeFi market, which cannot achieve the goal of inclusive finance. Our expected DeFi 2.0 should completely solve this problem. It aims to gradually realize customers' understanding of the project through process-based guidance, create a common community full of humanity, and strengthen the relationship between customers and the platform while standardizing the entire application system. Contact, so that the general public can understand DeFi and dare to invest.

Secondly, many people in the industry will compare DeFi to "Lego building blocks" and talk about it. However, this way of building blocks has serious flaws in risk transmission. The openness of the blockchain makes DeFi projects vulnerable to hacker attacks, thus burying potential financial security risks from the source of the project. In the future, DeFi 2.0 projects should avoid using this method of building blocks, but provide a complete financial solution through top-level design, consider the risk relationship of each sub-project in the platform, and strengthen the risk while expanding business through risk hedging means. The ability to disperse and isolate, such as providing deposit insurance, over-collateralization, option stop loss and other risk control measures to completely reduce system risk and maximize the value of customer assets.

At the same time, observing the existing DeFi projects in the market, we can find that they are more similar to small and exquisite financial toys than a complete financial system. They are often designed and developed by programmers, which is the result of "engineer culture". Inability to understand the nature and characteristics of professional financial products. The future DeFi 2.0 project needs to reshape this model. It uses professional financial product experts and engineers to combine various parts of the ecology into a whole, and strengthen the sustainability of DeFi based on traditional liquidity. DeFi 2.0 will use a professional team to combine various independent financial derivatives in the past to help users quickly synthesize new financial assets, realize the interconnection between different financial markets, and create a new asset industry chain.

Fourth, we expect that another major advantage of DeFi 2.0 is that it can maximize asset efficiency. Due to the nature of decentralization, users often need to provide over-collateralized assets, which has caused the disadvantage of inefficient use of assets in most 1.0 projects. Version 2.0 will generally adopt the innovative equal-amount mortgage and non-full-amount mortgage models, fully learn and imitate the practices of the traditional financial system, and greatly improve capital efficiency.

Finally, it must be realized that DeFi 2.0 must continue to maintain and strengthen the "decentralization" feature. The founding team of the project only provides a platform for user transactions, and should not have the idea of ​​controlling the platform and currency price from the very beginning. The experience and lessons of the past few years have proved that ICO is a wrong incentive mechanism. DeFi 2.0 should adopt a better token issuance mechanism, which greatly reduces the control ability of the founding team, but allows users to have a high degree of autonomy and fully Use the governance mechanism of DAO to ensure the orderly evolution of the project.

It can be seen that the transformation of the DeFi2.0 ecology will be a major transformational innovation in the currency circle, providing better liquidity for financial development, increasing the temperature of financial services, and truly achieving safe and efficient universal financial inclusion develop. I believe that projects that truly understand the DeFi2.0 model will be able to take the lead in the future market and grasp the new wave of development in the currency circle.